When shopping for a vehicle in Ontario, you’ll have to make the choice between leasing or financing. Leasing a car means that you are paying for the usage of a vehicle, like a long-term rental. Financing a car means taking a loan to purchase the vehicle outright, and then paying off that loan over time. When making this decision, you should consider your lifestyle, personal needs, and the commitments you are willing to bear - the right choice for one person can be the wrong choice for another.
By leasing a vehicle, you can easily exchange it for a new model when your term is over, but your payments don’t build equity toward ownership. Since you don’t own the vehicle, you’ll also be bound to specific mileage limits, and you can’t make any modifications to the vehicle. On the other hand, owning a car through financing sounds appealing, but is a long term commitment. By financing a vehicle, you are committing to owning a vehicle for what could be 10-15 years or more. You are free to do with it what you want, but you also need to maintain it. Of course, since you own it, you can also decide to sell it at some point. Financing vs leasing a car both have their pros and cons, and the best choice depends on your personal needs and situation.
Still not sure on the difference between leasing and financing a vehicle?
We've broken down the key differences below!
A leased car means that someone is paying to use it for a certain period of time. The person leasing the vehicle doesn't own it, and will return it after the lease is over.
An auto lease is an easy way to drive a new vehicle without the commitment of ownership. You’ll start by choosing a car and working with the dealership to agree on a lease term (usually 2-4 years), and a mileage limit that fits your driving needs. After an upfront payment, you’ll make monthly payments covering the car’s use. During the lease, you’ll need to maintain the car and stay within the mileage limit to avoid extra fees. At the end of the lease, you can return the car, purchase it, or lease another vehicle.
Yes, you can lease a used car in Ontario, although it is less common than financing or cash purchases. Most used cars that are offered for lease are certified vehicles or used company demos. Similar to leasing a new car, it's a great option if you are not looking to own a vehicle and want lower monthly payments.
Leasing a car has many pros, including lower monthly payments and overall total cost. Leasing is also a great option for people who like to change cars every few years, as once their lease term is up, they can lease a newer model. The cons are that you never build ownership towards a car, and you are restricted to rules set by the lease, such as no modifications, or distance driving limits. Similarly, the pros of financing a car are that you own the vehicle, which you can keep and use however you want - but financing tends to be more expensive in both monthly payments and overall total cost.
Whether you want to lease or finance your car depends on your long-term intentions. If you’re the type of person who likes to have new cars every few years, then leasing makes much more sense financially. However, if you intend to buy a car and use it until it dies, taking out a loan is a better option. In between, it all depends on the level of financial commitment and ownership you prefer to have of your car.
How Lease Payments Are Calculated?
Buying a New Car In Ontario?
Buying a Used Car in Ontario?
Buying a Used Car vs a New Car?
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